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HMRC internal manual

Compliance Handbook

Charging penalties: charging penalties: introduction: offshore enabler's penalties: overview

A person may be liable to an enabler penalty if they have encouraged, assisted or otherwise facilitated another person to carry out offshore tax evasion or non-compliance. Both conditions A and B must also be met:

Condition A is met if they knew that their actions enabled, or were likely to enable, another person to carry out offshore tax evasion or non-compliance. A person carries out offshore tax evasion or non-compliance if:

  •  they commit a relevant offence, or
  • their actions make them liable to a relevant civil penalty relating to Income tax, Capital Gains tax or Inheritance tax.

Condition B is met when the person carrying out the offshore tax evasion or non-compliance:

  • has been convicted of a relevant offence and the conviction is final
  • is liable to a relevant penalty and the penalty is final, or
  • HMRC has entered into and agreed a contract settlement with the person carrying out the offshore tax evasion or non-compliance in place of assessing a penalty or taking proceedings to recover such a penalty.

For specific guidance on:

  • when an enabler penalty will apply see CH124400
  • what is a relevant offence and a relevant penalty see CH124300.

There are two types of enabler’s penalty:

  1. Maximum  penalty for all cases except where the enabler penalty relates to an offshore asset move

To calculate the penalty you use the original amount of Potential Lost Revenue (PLR) used to apply a penalty to the person who carried out the offshore tax evasion or non-compliance.

The maximum penalty is the higher of:

  • 100% of the PLR

or

  • £3,000
  1. Maximum penalty where the enabler penalty relates to an offshore asset move

To calculate the additional penalty for enabling an offshore asset move you use 50% of the original amount of PLR used to apply a penalty to the person who carried out the offshore tax evasion or non-compliance.

In certain circumstances the enabler may be liable to a standard penalty for enabling another person to carry out offshore tax evasion or non-compliance and they may also be liable to an offshore asset move penalty. The standard penalty and the offshore asset move penalty are not mutually exclusive.

The PLR, in relation to a tax year, is the total for the year of:

  • PLR used to calculate the underlying penalty charged under Schedule 24 FA 2007 or Schedule 41 FA 2008
  • the liability to tax used to calculate the underlying penalty charged under Schedule 55 FA 2009
  • PLR used to calculate the offshore asset move penalty under Schedule 21 FA 2015.

The penalty can be reduced depending on:

  • the quality of disclosure (see CH124600 and CH401282)
  • if the disclosure was prompted or unprompted (see CH124600 and CH403202)
  • if a special reduction is due (see CH124600 and CH403250).